AT&T Mobility LLC v. Concepcion Et Ux.
For yearsa number of legislative technocrats have advocated for the increased use of Alternative Dispute Reconciliation mechanisms in solving business contractual issues in reference to business law. However, history has showed that a number of companies are using these ADR systems to cover themselves from liable costs that would be identifiable and punishable in court.This practice though legal is unethical as it exposes innocent individuals to either personal or property damage. The case below is an example of how organizations have tried to use the law to cover on some of their dubious practices
AT&T LLC v. Concepcion was a contract law case argued on November 9, 2010 and decided on April 27, 2011. The case was between Vincent and Liza Concepcion (respondents) and AT&T (petitioner) over a contractual dispute where the respondent accused the petitioner of false advertising when they had to pay Sales Tax on the sell valuefor a commodity that was advertised as free under AT&T service contract. The case became more complicated when the respondent presented the lawsuitin a California Federal District Court as a class action alleging, inter alia though the service contract stated that this was unaccepted. According to the petitioner, any complaints based o products or contracts would be settled through an arbitration further declining the existence of a class action lawsuit against them. After deliberation, the District Court denied the petitioner the privilege of handling the case by arbitration relying on decision provided by the Supreme court during the Discover Bank case stating the it would be imprudent to allow the precedence of a system that would seclude class wide proceedings yet the respondent repented the public (Farrow, 2014). Furthermore, under the California law the Federal Arbitration Act (FAA), states that arbitrations are considered valid, irrevocable and enforceable in contractual law only if the case presented does not involve public interest in form of a class action. During the Hines v. Davidowitzcase, which also represented the use of arbitration in class action, cases stating that it stands as a barrier to achieving as well as executing the entire purpose of the court passing proper decisions as stated by congress (Mannino, 2013).
When Vincent and Liza Concepcion presented their case to the District Court AT&T stated that in accordance to the contract the case could not be herd or dealt with as a class action. However, the respondents stated this could be not the case as the contract was invalidated by the law of contract that stipulated invalidation in case of a breach, which was the case in the matter. The District court in reference to Section 2 of the Federal Arbitration Actstated that the essentialdoctrines of an arbitration between parties are a matter of the placed contract in this case favoring AT&T. At this point,the court through the powers of the constitution had place the aberration policy as stipulated by the contract. Nonetheless, the contract between AT&T and its clients played a significant role on placing the suit as a class action case. According to the agreement for any contractual agreements that had not been settled within 30 days, AT&T would yield some of its arbitration powers; for instance, such cases would be heardwhere the client was billed and the regulations would be set by the region and not the contract as stipulated earlier. This would suggest that for California, with state laws against arbitration on issues regarding knowledge, AT&T had to forfeit their privilege against class action suits as stipulated by the contract itself. From the above text, it can be argued that due to clauses in the contract AT&T despite having the position of advantage regarding the enforcement of contractual terms forfeited their powers to the respondents.
Despite the above reason, the respondents clearly felt the contract was invalid. According to the FAA regulations in California, courts had the powers to invalidate the terms of arbitration as represented by the contract if the terms clearly protected an entity with superior bargaining powers from responsibilities from class action suits based on their own fraud. The logic used in this case was that if arbitration terms were clearly playing a role in making it hard for clients to achieve the full objective of the FAA principle majorly on small money cases where associates of a lower class would expected be worse off case then arbitration would be revoked (Scalia & Ring, 2004). The AT&T terms stated that complaints would be presented on through personal channels this suggesting that in case the company would encounter a charge of fraud like the one presented by the respondents it would necessitate all affected parties to make personal inquires hence affecting efficiency of the FAA principle which was unacceptable. Consequently, this would suggest the existence of a class action lawsuitthat would serve all affected parties once.
The Existence of Law and Ethics have been in constant discussions over the past century considering that there are a number of legislative principles that make unethical practices legal. In cases where arbitration has been in contest it always has been in sections where the ethics of a superior organization over their lesser counterparts is questioned. The arbitration terms used by AT&T though recognized by law may be termed as unethical. Considering the number of firms that have been misusing company information disclosure on the basis of using law loopholes to cover them from liability is on a higher trend. AT&T LLC v. Concepcion is a good case example where the contract provided would cover the company from any prosecution or responsibility in case any damage caused by their product or service. It would be imprudent for any court to allow such arbitration terms to stand considering that it would place the public how they are supposed to serve at a high risk of being tricked to potentially damaging transactions. In cases where the presence of public knowledge it would be unethical to assume that the public would waive their right to information. The District court in California was right to revoke AT&T’s privilege to arbitration considering that they may have intentionally knownabout the fraudulent issues they were involved in and wanted to be free from any liability.
In summary, the AT&T LLC v. Concepcion is an example where an organization utilized the loophole in the current Alternative Dispute Reconciliation Mechanisms to legal covers themselves from criminal as well as unethical practices. When the respondent in this case learnt of the extra on sales in terms of taxes in a case where they were falsely led to believe the costs were free they set of to prosecute AT&T. This according to AT&T was not an issue; however, when the petitioners understood that this was a class action lawsuit the set out to block the suit on the basis that they were protected by the service contract they had entered with its clients such as the respondents. On the other hand, the respondents set an argument stating that the contact was s invalidated by the petitioner’s action as well as the Federal Arbitration Act. The court in passing their judgment after duration of almost two and a half years stated that in reference to the laws of the land any use of arbitration is stipulated by the contract. However, with the existence of exits by law the courts are allowed to revoke the privileges offered by the contract. In the case of AT&T, the suit represented the community and the precedenceof public knowledge was one of the exits that the District court used to revoke arbitration privileges. Additionally, California regulations allow courts to revoke any arbitration rights when the terms of a contract clearly shelter a party with superior bargaining powers from facing responsibilities of fraudulent actions against masses. The California District Courts took an ethical stance when they revoked the AT&T petition aiding the public attain the best judicial service.
Farrow, T. C. W. (2014). Civil justice, privatization, and democracy. Toronto: University of Toronto Press.
Mannino, Edward F. (2013). Lender Liability and Banking Litigation. Law Journal Seminars Pr.
Scalia, A. & Ring, K. A. (2004). Scalia dissents: Writings of the Supreme Court’s wittiest, most outspoken justice. Washington, D.C: Regnery Pub.